A standardized procedure can streamline the vendor selection and bidding process, resulting in the best possible work at the lowest possible cost. A professional management company can ensure that your process is organized and achieves this result. If you aren’t working with a management company, these guidelines will help you to refine each stage of your process:

Recruit and Qualify Vendors

Develop a list of the types of contractors that may bid on the project. Some offer comprehensive services, while others offer a more focused service. Decide which is preferable and choose vendors with proven experience in handling the projects you are outsourcing. Start your list by getting recommendations from nearby associations, and make sure that all contractors are licensed and bonded.

Be sure to avoid the appearance of nepotism or impropriety by eliminating contractors with family or financial ties with board members.

Develop Project Bid Specifications

Once you have a list of three to six prospective vendors, invite them over for walk-throughs with your community association manager. The manager will use these meetings to fine-tune his understanding of the scope of the project and to learn about the nature of the work from the experts. This knowledge will be applied in developing the project bid specifications.

Proposals and contracts supplied by contractors using their own forms tend to favor the contractors over the HOA. These are often short forms, lacking detail, with illegible handwritten notes. To ensure that you can compare apples to apples, supply forms to be completed with detailed project specifications. These enable bidders to be precise and for your HOA to eliminate unscrupulous vendors from consideration. If you must rely on a vendor’s contract, have it reviewed by the HOA attorney prior to execution.

Specifications should include:

• Full descriptions of the materials and equipment to be used, along with suppliers
• Payment terms and schedules
• Penalties for missing deadlines
• Requirements for insurance, permits, and bonds
• Warranties that must be included, including minimum coverage periods
• Key personnel with the vendors and their responsibilities
• How any damage to property will be addressed, and by whom

Specify the Bid Packet and RFP Components

The Request for Proposal (RFP) ensures that vendors bid on precisely the same work. In your RFP, clearly identify the scope of the project, including what it includes and excludes. Detail the materials to be used and the specific areas in which work will be performed, as well as any other pertinent details. An experienced management company provides substantial value in this stage. If you don’t have one, consider bringing in a consultant to evaluate the options before you put together your RFP.

A basic list of bid packet components should include:

• List of the vendor’s qualifications
• Past projects related to this project
• List of subcontractors and relevant pricing information
• Applicable certifications
• Proof that contractor is licensed and bonded

Manage the Bid Process

As you acquire the bids, ensure that all the information you requested is supplied in full detail. If information is missing, ask the vendor to complete the form. Professional management companies perform an extensive round of fact-checking, ensuring that all claims are true and verified by previous clients. If you don’t have a management company, designate someone to manage the process and perform due diligence.

Develop the Bid Summary Report and Present to the Board

The final stage of the process involves summarizing all the key considerations in a format that will enable the board members to make an easy visual comparison. We recommend using spreadsheets or project management software, as well as corresponding documents with full explanations and details as to how (and by whom) the vendors’ answers were verified.

Finally, don’t reduce your final decision to the lowest cost. Ask the board to consider which vendor will provide the best value for the HOA’s investment in the project.